CNBC

Lead Story

U.S. Treasury Secretary Scott Bessent’s upscaled $4 billion-plus debt buyback program has failed to soothe the bond market, as yields rebounded and wiped out initial gains after the national debt topped the $40 trillion mark for the first time. Investors are increasingly pricing in higher inflation fears across the curve, setting up a high-stakes showdown for newly-installed Fed Chairman Kevin Warsh at next week’s Jackson Hole symposium.

Markets & Economics

U.S. equities are on track to snap a three-week winning streak, with the S&P 500 down 1.9% and the Nasdaq Composite losing 2.5% week to date, pressured by rising borrowing costs and geopolitical strains. The benchmark 10-year Treasury yield rose to 4.73% and the 30-year yield touched 5.27%, completely erasing the initial drops triggered by Treasury Secretary Scott Bessent’s buyback announcement. Traders responded to the liquidity move by bidding up the 10-year breakeven inflation rate to 2.34%—the highest in over two months—suggesting the intervention may be inflationary. These fiscal strains are covered in detail on Fixing the U.S. Debt, while the broader policy path is discussed on Fed and Inflation Expectations.

Business & Earnings

In corporate dealmaking, Broadcom is reportedly in talks to raise upwards of $70 billion to $80 billion in debt to fund AI chip financing for customers like Anthropic, a massive capital injection mirroring Nvidia’s recent $500 billion financing move. On the hardware front, Micron CEO Sanjay Mehrotra explained on “Mad Money” how AI-driven high-bandwidth memory (HBM) has permanently altered the memory industry’s cyclical dynamics, securing strategic long-term agreements. This chip boom was further highlighted by Samsung Electronics, which announced a blockbuster shareholder return package of 90 trillion to 110 trillion won ($65.1 billion to $79.52 billion) for 2026. Retailers also moved sharply, with Ross Stores gaining 4% on a beat-and-raise quarter, while Walmart’s shares sat flat following a brutal 9% post-earnings sell-off.

Investing & Commentary

Billionaire Ray Dalio warned that the U.S. financial condition is at an inflection point, advising investors to underweight debt and allocate up to 15% of portfolios to gold and bitcoin. JPMorgan’s James Sullivan cautioned that upscaled Treasury buybacks are like “paying your mortgage with your credit card,” shifting long-term deficit issues down the road while making asset-allocation decisions increasingly complex as bond yields compete with stocks. Meanwhile, option strategist Mike Khouw flagged the materials sector as an overlooked play, noting that at-the-money implied volatility for the Materials Select Sector SPDR (XLB) is exceptionally cheap at just 14%.

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• Bessent’s Full Treasury Strategy (CNBC): Treasury Secretary Scott Bessent details his “big toolkit” and the administration’s fiscal consolidation measures to address the burgeoning budget deficit.

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